Tom,
In the short run, if they beat estimates I think that APCC, or any Nasdaq hi-tech stock is going to be limited until this correction is over.
It seems for the past 6 months or so just meeting or slightly exceeding the estimate is not enough to create an updraft. The new term on the street is the "whisper" estimate. Since we have had the whisper estimates over the past 6 months, this seems a sure sign of speculation and at least a short term top.
As I have said in past responses, I am a distributor for APCC products. Our sales have been flat to down over the last quarter, however this quarter is usually flat to down anyway because of winter.
How much of a bite will the new Symetra line take out of the bottom line before it is up in running is still a question in my mind. We don't even have the product to sell yet, and APCC is going to have to spend a fortune to get the word out to the public and combat Exide, Best and Liebert.
Also, overseas sales have been one of APCC's fastest growing segments, so I think that the earnings will depend greatly on the foreign markets.
This is going to be one of the most interesting earnings reports quarters in some time. Many of the PC makers have been warning about slowing sales. In my opinion this is very true because the new version of Windows 95 and NT have been postponed at least until 1998 or beyond. This will cause many corporations to slow down their spending becuase they will want to wait and see what will happen once these new operating systems come out. Most of the business software we use today runs just fine on pentium machines, and most large companies have already upgraded their computers to pentium during the past 2 years. What does this mean for APCC, people will use their existing equipment and not care so much about extra power protection if they don't already have it.
I have been in the computer business for over 13 years now and have witnessed and profited from almost every big announcement from the large manufacturers. (from selling their products, not always owning the stock). We will have to wait and see what Intel and Microsoft have in store for us over the next year. In the mean time it will be a good time for all of us to catch our breath.
In my opinion, if you are patient, you will be able to pick up APCC in the mid teens over the next few months.
Good luck trading,
Phillip |
